IRELAND - Aer Lingus said it will negotiate with trustees of both its defined benefit schemes to create a defined contribution plan for all its employees as part of a company cost-cutting measure.
The airliner announced today it planned to axe some 600 staffers as part of a two-part "transformation plan" that will save the company €97m (US$142.5m), excluding fuel costs, per year.
Part of the plan is to tackle a deficit in the company's pension fund.
The company said: "Aer Lingus' employees face significant challenges in relation to the current deficits in the Irish Airline Pilots Superannuation Scheme and the Irish Airlines (General Employees) Superannuation Scheme, into which Aer Lingus makes fixed payments on a defined contribution basis."
According to the company's annual report, Aer Lingus paid €29.3m into its defined benefit pension funds in 2008.
The company said it has met with trustees and discussed the possibility of adopting "defined benefit accounting rules for the schemes, which would result in both income charges and significant balance sheet liabilities."
Aer Lingus also said it has proposed introducing a defined contribution scheme for all employees that will "attempt to recognise" past service.
The firm said it will talk to its pension fund trustees about the finding a pension solution, but provided no further details.
Spokeswoman Sheila Gahan could not immediately provide more details.
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